CROWN LIABILITY FOR RATES

Hawera Star, Volume LIV, 7 March 1935, Page 5

CROWN LIABILITY FOR RATES

REPLY TO REPRESENTATIONS MISAPPREHENSION CLEARED (by i«Tegrrapn-T-ress Association.) WELLINGTON, March 6. Replying to representations made recently by the Municipal Association regarding the effect on local bodies of the Mortgage Corporation Bill, the lit. Hon. J. G. Coates in a letter to the president of the association, Mr D. G. Sullivan, M.P., says: “It would appear that your association is under some misapprehension in regard to this matter. The effect of the clause is that the existing protection of the Crown from liability for rates is maintained for mortgages handed over, the reason being that the State will still be financially- responsible for these mortgages, as, in effect, they are to be guaranteed 100 per cent. “This position, however, continues only so long as the existing securities remain and in respect of any new securities taken by the corporation, either for c-ash advances or in the course of adjustment or refinancing operations, the corporation will he in the same position as a private mortgagee.

“Repayment of mortgages will also decrease the volume of securities in respect of which the corporation, virtually as an agent for the Crown, will he protected- from liability for rates.

“It will thus be. dear that far from becoming worse the position of local bodies will be nrogressively improv ed.”. '•